SEBASTINIAN OFFICE OF LEGAL AID

4 July 2022

Mr. Jun Edward L. Real III

HR Head
J& R Retail Company

Re: Legal opinion for extending the 30-day advance notice

requirement in employee resignation

Dear Mr. Real:

This is to reply to your letter seeking for legal opinion regarding the following matter:

1. Legality of extending the 30-day advance notice requirement before resignation;

2. Application of the 60-day advance notice requirement to current employees whose

contracts only require 30-day advance notice; and

3. Remedy in the event of non-compliance of 30-day advance notice requirement.

The Facts

Per our discussion and the documents, you have shown me, the following are the
pertinent facts:

Your company wants to implement a policy that an employee who resigns, or intends
to resign, should give you a 60-day advance notice before his/her resignation becomes
effective to enable us to look for a replacement.

In line with this, you now question the legality of the application of the 60-day advance notice
requirement to your current employees whose employment contracts only require them to give a
30-day advance notice. Likewise, the remedies available under the law in the event that
employee resigns without complying with the advance notice requirement.

The Applicable Law

The applicable law is Art. 300 of the Labor Code. It provides that:

“Article 300 Termination by Employee. (a) An employee may

terminate without just cause the employee-employer
relationship by serving a written notice to the employer at least
 one (1) month in advance. The employer upon whom no such
notice was served may hold the employee liable for damages.”

On its face, the foregoing provision does not appear to directly govern your situation.
It seems to apply only to cases where at the time of the resignation is without just cause, the
employee must give a one (1) month advance written notice for resignation to the employer
to enable them to look for a replacement and prevent work disruption.

Your case, on the other hand, is one where at the time of the resignation involves a
policy wherein the employee who resigns, or intends to resign, should give 60-day advance
notice before his/her resignation becomes effective to enable you to look for a replacement.

The Applicable Jurisprudence

The Supreme Court in the case of Intertrod Maritime Inc. vs NLRC (G.R. No. 81087, 198
SCRA 318, June 19, 1991) explained the matter in this wise: “Resignation is the voluntary act of
an employee who ‘finds himself in a situation where he believes that personal reasons cannot be
sacrificed in favor of the exigency of the service, then he has no other choice but to disassociate
himself from his employment.’ The employer has no control over resignations and so, the
notification requirement was devised in order to ensure that no disruption of work would be
involved by reason of the resignation. This practice has been recognized because ‘every business
enterprise endeavors to increase its profits by adopting a device or means designed towards that
goal.’”

The one (1) month advance written notice is the standard number of days for the
employer and the employee to render a proper turnover. This period is usually found in most
employment contracts or included in a company’s Collective Bargaining Agreement (CBA), if
there is one.

Is it then legally valid to extend 30-days’ notice requirement for resignation to be valid?
It depends. If the parties agreed in the contract that resignation should be made with 60-day prior
written notice, or any longer period for that matter, then that stipulation is enforceable by the
employer. But if there is nothing in the contract or any agreement that says so, there is no basis
for the company to enforce.

It was explained by the Supreme Court in Hechanova vs. Matorre (G.R. No. 198261, 16
October 2013) that the 30-day notice requirement for an employee’s resignation is for the benefit
of the employer in order to afford the him enough time to hire another employee if needed and to
see to it that there is proper turn-over of the tasks which the resigning employee may be
handling.

But if the employee agreed on a longer turnover period than 30 days he is likewise bound
by his commitment. Since the option not to suffer work beyond 30 days upon submission of
resignation is a right on the part of the employee such right can also be waived.

Since the 30-day notice is for the employer’s benefit, he may waive such period. Thus,
in Paredes vs. Feed the Children Philippines, Inc. (G.R. No. 184397, 9 September 2015), the
Supreme Court elucidated that the rule requiring an employee to stay or complete the 30-day
period prior to the effectivity of his resignation becomes discretionary on the part of management
as an employee who intends to resign may be allowed a shorter period before his resignation
becomes effective. Hence, as part of management prerogative, an employer has the right to move
the effectivity date to an earlier date.

Take heed that if an employee does not give the 30-day notice, he can be held liable for damages
to the employer. An aggrieved employer may file a civil case for damages and breach of
contractual obligation with the regular courts. As ruled in Eviota vs. Court of Appeals (G.R. No.
152121, 29 July 2003), while seemingly the cause of action arose from employer-employee
relations, the employer’s claim for damages is grounded on wanton failure and refusal without
just cause to report to duty coupled with the averment that the employee maliciously and with
bad faith violated the terms and conditions of the contract to the damage of the employer. Such
averments removed the controversy from the coverage of the Labor Code of the Philippines and
brought it within the purview of the Civil Law.

Analysis and Conclusion

Thus, taking into consideration the provision of the Labor Code and applying the rule
of reason, Art. 300 of the Labor Code would apply to your case. In line with this, Pursuant to
Art. 6 of the Civil Code, it likewise provides that rights may be waived, unless the waiver is
contrary to law, public order, public policy, morals or good customs, or prejudicial to a third
person with a right recognized by law.

The SC held that the doctrine of waiver extends to rights and privileges of any
character, and, since the word ‘waiver’ covers every conceivable right, it is the general rule
that a person may waive any matter which affects his property, and any alienable right or
privilege of which he is the owner or which belongs to him or to which he is legally entitled,
whether secured by a contract, conferred with a statute, or guaranteed by a constitution,
provided such rights and privileges rest in the individual, are intended for his sole benefit, do
not infringe on the rights of others, and further provided the waiver of the right or privilege is
not forbidden by law, and does not contravene public policy and the principle is recognized
that everyone has a right to waive, and agree to waive, the advantage of a law or rule made
solely for the benefit and protection of the individual in his private capacity, if it can be
dispensed with and relinquished without infringing on any public right, and without detriment
to the community at large (Philippines vs. Donato, G.R. No. 79269, June 5, 1991, 198 SCRA
130.).
In sum, the employee has the right not to be required to serve beyond the thirty-day
period after submitting his resignation. However, he can waive such right by agreeing, for
instance, to observe a 60-day turnover period.

To conclude, it is possible to extend the 30-day notice for resignation to 60 days.

However, if it is expressly provided in their contracts that they are only required 30 days, the
stipulation in their contract would prevail. This is consonant with the principle that obligations
arising from contracts have the force of law between the contracting parties and should be
complied with in good faith. Unless the stipulations in a contract are contrary to law, morals,
good customs, public order or public policy, the same are binding as between the parties.

As to the remedies available in the event that employee resigns without complying with
the advance notice requirement, it is my position that similar rule would apply. To repeat, the
law simply states that “the employer upon whom no such notice was served may hold the
employee liable for damages.” It did not qualify the kind of damages, which the employer may
ask from his employee. It may refer to actual damages or liquidated damages. These are the
forms of damages which the employer has sustained as a result of the employee’s instant
termination of the employer-employee relationship.

Article 2199 of the Civil Code tells us what are actual or compensatory damages:

“Except as provided by law or stipulation, one is entitled to an adequate compensation

only for such pecuniary loss suffered by him as he has duly proved. Such compensation is
referred to as actual or compensatory damages.”

Actual damages may refer to loss of profits of the employer as a result of the abrupt
absence of the employee during the supposed turnover period. This includes costs for cancelled
transactions and disrupted operations of the employer, which can be reasonably linked to the
employee’s failure to comply with his responsibilities due to immediate resignation.

Moreover, the employer may also incur expenses to hire an immediate replacement in
order not to jeopardize the operations. If the employer proves these pecuniary losses and
attributes them to the non-observance of the turnover period, the employee may be held liable
therefor.

Aside from actual damages, liquidated damages may also be available for the employer.
Under Article 2226 of the same Civil Code:

“Liquidated damages are those agreed upon by the parties to a contract, to be paid in
case of breach thereof.”

The employee may have unintentionally forgotten that his employment contract contains
this form of damages. This stipulation triggers when a violation of the agreement, including non-
observance of the turnover period, occurs.

Aside from damages, the employee can also be required to reimburse certain expenses.
The principle of unjust enrichment recognizes that one cannot enrich himself at the expense of
another.

Recommendation

Like any separation, severance of employer-employee relations is a difficult

process. However, before parting ways, it is prudent to follow the procedure laid down under the
Labor Code, not only for the sake of complying with the law, but also to maintain cordial
relations.

The safest way for a resigning employee is simply to undergo the turnover period stated
in a contract, or a CBA, or the period in the Labor Code. He may also seek a compromise with
his employer, if possible, for a waiver of this period. He must remember that he bound himself to
follow the terms of his contract when he got employed. His promise includes complying with the
standard manner of voluntarily resigning and the process that attaches with it.

It is also advisable for the employee to check whether the contract or CBA provides a
longer or a shorter turnover period. If none is provided, he must comply the 30 days stated in the
Labor Code as the default period.

Respectfully,

Rexenne Marie A. Mariano

SSC-R College of Law
Claro M. Recto, Manila